It creates a tree-style output of all the (sub)folders and (sub)files from the current folder and down(deeper)

Quoting some of hackzine's words

"Murphy Mac sent us a link to a handy find/sed command that simulates the DOS tree command that you might be missing on your Mac or Linux box. [..split...] Like most things I've seen sed do, it does quite a bit in a single line of code and is completely impossible to read. Sure it's just a couple of substitutions, but like a jack in the box, it remains a surprise every time I run it."